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Individual Voluntary Arrangement (IVA)
An IVA is a legally binding agreement between you and your creditors which, if agreed, will freeze all interest and charges and write of the debt you cannot afford to repay.Find out if an IVA is a suitable solution for your debts »
IVAs (Individual Voluntary Arrangements) were introduced by the Government in 1986 as an important piece of legislation which allows people with a serious debt problem to avoid the pain and trauma of bankruptcy. Every year over 40,000 people enter into an IVA as a way to resolve their debt situation.
The IVA process is legally binding, but is simpler than bankruptcy and with a less severe outcome. The first step will be for our Insolvency Practitioner (IP) and team to assess your suitability for an IVA and calculate how much you can reasonably afford to pay each month towards your IVA.
We use approved guidelines to calculate what you need in order to pay your household bills and other living expenses ‐ this way we are able to demonstrate to your creditors that the amount you are offering to pay towards your unsecured debts is genuinely all you can afford. You may be required to forego certain luxuries, but our assessment is designed to ensure that you maintain an acceptable standard of living whilst you are in the IVA.
Once you have reviewed the proposed IVA with us, we then submit it to all of your creditors, who will vote on it (this is called the “Meeting of Creditors”, though they rarely physically meet). As long as the majority of your creditors accept your IVA proposal (i.e. those holding at least 75% of the debt) then all your creditors are legally bound by the agreement.
Throughout the term of the IVA (normally 5 years) our Insolvency Practitioner and team will supervise your case and manage the fund into which you pay your IVA contributions (the agreed regular monthly amount). The IP will use the funds to make payments to your creditors (known as “Dividends”) as well as to recover expenses and to cover the IP fees.
We will regularly review the situation with you, and will look to support you throughout the duration of your IVA. A full assessment of your IVA is made each year, with a report sent to you and your creditors.
When your IVA is successfully completed, whatever debt remains is written off by your creditors, leaving you completely debt free.
An IVA could be the right solution for you in the following circumstances:
The amount you pay each month is based solely on what you can realistically afford. Our Insolvency Practitioner and team will work through your current financial situation with you to identify what you can realistically pay each month towards your debts. We use approved guidelines to calculate what you need in order to pay your household bills and other living expenses ‐ this way we are able to demonstrate to your creditors that what you are offering to pay is genuinely all you can afford.
As you might imagine, IVAs require a lot of administration and for this we will charge a fee. However creditors and IVA providers have agreed an industry-standard scale of charges for setting up and administering the IVA. At Bridgewood we do not charge you directly for setting up your IVA, rather we agree with your creditors to take our fees from the funds paid into the IVA, which would otherwise go to the creditors.
At Bridgewood we are passionate about supporting you all the way through your journey to financial freedom. This means, first and foremost, that we give you the best advice we can in identifying the right solution for you.
So before putting you forward for an IVA we will work with you to ensure that you are confident you can make regular monthly contributions for the term of the IVA (usually 5 years). This includes helping you to make the most of your current financial situation, by helping you get the best deals on your utility bills, insurance and banking ‐ that way you will be well set to face the rigours of the IVA term.
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